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Free Nelson Mandela’s Estate

Tuesday, 12 August 2014 21:34

Winnie Mandela, the ex-wife of Nelson Mandela, filed a claim against his estate seeking control of his ancestral home for her daughters.  Mandela divorced Winnie in 1996 after he charged that she had been unfaithful to him during his 27 year imprisonment.  Mandela’s  will left the ancestral home to his 3rd wife who later waived her right to half of his estate in exchange for  properties in her native Mozambique. Mandela’s grandson later ordered the exhumation of the bodies of 3 of Mandela’s children from the ancestral home, but Mandela’s daughter had the bodies re-interred at the disputed home.

Several points, if I must:

1.  It is odd that an elderly mother would be the one to file a claim on behalf of her middle aged daughters.  Adolescence is seemingly prolonged every year.

2.  If the South African court system moves at the same pace as it did for the Oscar Pistorius trial, Winnie and the third wife will die before there is a resolution.

3.  Whoever can convince the various members and factions of the Mandela family to have a group hug deserves a Nobel Peace Prize.

nelson and winnie article-2717470-204BF0F800000578-727_634x475

 

Halitosis, Ponzi Schemers, and Politicians.

Tuesday, 06 May 2014 22:20

Rachel “Bunny” Mellon was the heir to the Listerine fortune and also the widow of philanthropist, Paul Mellon, who in turn was the only son of industrialist and Secretary of Treasury, Andrew Mellon.  Although she tried to remain out of the public eye, Mrs. Mellon gained some notoriety during the 2008 election for contributing to John Edwards’ campaign to help him support Rielle Hunter and her baby fathered by Edwards.  Her 37 page will and 9 codicils comprising another 40 pages were recently admitted to probate in Virginia.  The will addressed a multitude of personal items, created life interests in various real properties for different individuals, gave $20 million to her 75 year old son, and made many charitable bequests.

Several points:

1.  An estate of this magnitude is generally suited for the privacy offered by a funded trust.  This is doubly so when the individual does not like publicity.

2.  An estate of this magnitude can also be well served by having the entire estate pass through the probate process so any potential will contest must be brought quickly (within 4 months of probate starting in Ohio) and creditors’ claims filed against the estate (six months from the date of death in Ohio).

3.  She was smart to change her will as circumstances changed for her, including the death of her daughter and the conviction of her initial co-executor for operating a Ponzi scheme.

4.  Unsurprisingly, she did not leave any funds to John Edwards for haircuts, child support, or otherwise.

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Even Rappers’ Estates Need to Pay Their Debts

Monday, 14 April 2014 20:44

I have previously blogged about rapper Nate Dogg and the financial issues surrounding his estate.  He died in 2011 without a will but with 6 children of unascertainable ages and different mothers and unpaid child support and medical bills of $290K.  His primary asset was a house with $200K of equity.  The administrator of his estate has a contract to sell the house for $340,000 but his children are opposing the sale because it will not leave them enough money.

Several points:

1.  A decedent’s debts must be paid before estate beneficiaries receive any proceeds of the estate. It is unfortunate for his children that there will likely be no assets left for them after the payment of debts, but an administrator cannot magically make a house worth more than the market is willing to pay nor make the debts less.

2.  If Mr. Dogg had wanted to provide for his children and not worry about his debts, he could have purchased a life insurance policy to benefit them.

3.  His house was worth $340K?  I doubt it was featured on MTV’s “Cribs.”

Nate Dogg

 

Shooting an Airball

Sunday, 06 April 2014 15:33

Lorenzen Wright played in the NBA for 13 years and earned $55 million.  Shortly after his retirement, he was the victim of an unsolved murder in a suspected drug deal.  He was survived by his ex-wife, Sherra Wright,  and their 6 children.  After his death, his ex-wife received $1 million in insurance proceeds in trust for the children.  Within 10 months of receiving the proceeds, she was accused of having spent nearly all of them on housing, furniture, cars, and travel.  She is now subject to probate court action to remove her as trustee.

Several points:

1.  It is never a good idea to have a former spouse serve as trustee for the children.  A financially savvy third party is a much better choice.  Newly divorced individuals should quickly revise their wills and trusts to remove the former spouse and to keep him/her away from assets for the children.

2.  In some defense of Sherra Wright, purchasing real estate with trust assets is not spending them, it is re-allocating the type of investment.

3.  I suspect that Mr. Wright is not the only former NBA player to have significant career earnings and to die with less than 2% of them remaining.  Annual child support and alimony payments of $330,000 tend to rapidly diminish one’s net worth.

 

 

As Tears Go By

Thursday, 27 March 2014 22:33

L’Wren Scott was the fashion designer girlfriend of Mick Jagger.  When she committed suicide 10 days ago, rumors swirled that she was in financial trouble.  After her will leaving her entire estate to Mick was filed in NY Surrogate’s Court this week, media outlets are reporting that she was not financially stressed because the probate documents listed her as the owner of an $8 million condo and $ 1 million of personal belongings.

Several points:

1.  The media outlets are incorrect and Ms. Scott could have been financially strapped.  NY (and Ohio) requires initial probate documents to reflect gross value of assets.  Debts and liabilities are not required to be listed so it is doubtful that she had a condo with $8 million equity.

2.  Leaving money to Mick Jagger?  No matter how much she wanted to show love for him, L’Wren might have been better off selecting a charity important to her and Mick, assuming she had assets to leave. Mick does not need a nickel from her which will only be taxed at his death (although he and Keith Richards might have a deal with the devil to live forever).

3.  As I have mentioned before, I remain available for media consultation on will and probate interpretation matters.  Someone has to assist in getting these stories reported correctly.

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I am an attorney located in Cincinnati, Ohio who practices in the areas of estate planning, probate, asset protection, and small business advice. I make a difficult and bewildering process as simple as possible. Most importantly, I provide "more for less" for my clients.